Is High College Tuition Defensible?

Coming from an upper middle class family, Bruce Bueno de Mesquita says, he could have afforded to pay some college tuition. Instead, he was the beneficiary of the tax dollars of less well-off New Yorkers. He argues that "tuition discrimination" makes private universities a fairer option.

Jason Gots is a New York-based writer, editor, and podcast producer. For Big Think, he writes (and sometimes illustrates) the blog "Overthinking Everything with Jason Gots" and is the creator and host of the "Think Again" podcast. In previous lives, Jason worked at Random House Children's Books, taught reading and writing to middle schoolers and community college students, co-founded a theatre company (Rorschach, in Washington, D.C.), and wrote roughly two dozen picture books for kids learning English in Seoul, South Korea. He is also the proud father of an incredibly talkative and crafty little kid.

02 November, 2011

What's the Big Idea?

Bruce Bueno de Mesquita got a great higher education for free. In the glory days of the City University of New York, he graduated from Queens College with strong enough credentials to secure a full fellowship at the University of Michigan’s PhD program in Political Science. Today, he is a professor at New York University and the well-known author of several books on game theory and the dynamics of political power.

Coming from an upper middle class family, de Mesquita says, he could have afforded to pay some tuition. Instead, he was the beneficiary of the tax dollars of New Yorkers who didn’t send their kids to public institutions. Is that fair? Not so much, he argues.

The high tuition of private universities, de Mesquita says, is misleading, because few students actually pay it. He sees it as a way of attracting educationally ambitious students and creating a social networking pool that will benefit them in their careers. This, he says, is how private universities compete against public ones. Most private universities engage in “price discrimination” – reserving scholarships for students in financial need and making the de Mesquitas of this world pay a bit more. No free rides for the rich kids.

What’s the Significance?

There are two intertwined questions here. 1) Does free market competition create better schools? and 2) How egalitarian is the “tuition discrimination” de Mesquita describes, really? Question one is playing out right now in the public school system nationwide, as privately run (but free to students) charter schools compete with traditional public schools for students and resources. Enthusiastically embraced by educational policy makers and politicians, charter schools have had mixed academic outcomes so far, failing (on average) to improve reading and math scores significantly more than their public competitors. This does not definitively refute the “improvement through competition” argument, but it doesn’t support it, either.

With respect to question two, it is also arguable that the specter of high tuition drives away not only the less academically ambitious, but also the less wealthy – students from families without a long history of college attendance, or experience with scholarships and low-interest-rate loans. These students are more likely to consider a $40,000 tuition categorically out of reach than those who can afford it, or those whose parents attended private universities at cost but now find themselves in reduced circumstances.

What is abundantly clear, however, is that the current models of higher education will be under close scrutiny for some time to come. Tuition discrimination or no, many students are graduating with enormous debt loads into a sagging economy. Educating students about student loans (“Know what you’re getting into, kid!”) is at best a halfhearted solution, given that the very existence of federal loans and their low interest rates are designed to encourage students to take them – and to boost their career prospects through higher education. It’s like giving away lollipops along with a flyer about dental care.

Private universities aren't likely to disappear any time soon, but the longer the economy lags, the more competition they'll face internally (from other schools) and externally (from alternate models, such as on-the-job training). The pressure to offer more affordable, high-quality educational options will become especially intense as online learning becomes an increasingly viable, sophisticated, and academically respectable option.